The bids placed for both the the multi-billion dollar power projects would be scrutinised and those who meet the parameters would be asked to submit the request for proposal (RFP) or the offer for tariff.

Power developers generating electricity at the cheapest rate would emerge the winner. The project is likely to be awarded by the end of the current fiscal.

While the Odisha project will be based on domestic coal, the Tamil Nadu project would be fired from imported fuel.

The Government believes that it is offering investment-friendly parameters for these projects and claims to have cleared the major regulatory hurdles required for the setting up of mega power projects.

In August, the revised standard bidding documents were given the go-ahead by an Empowered Group of Ministers.

“The fuel charge is no longer a bid parameter. That takes away most of the variable risks of the project. Moreover, land, water and environment clearances have already been acquired for the project,” said a PFC official, the nodal body holding the auction.

At present, India has awarded four ultra mega power projects — one to Tata Power and three to Reliance Power. So far, only Tata Power’s project at Mundra in Gujarat is fully operational.

"The initial response to both the UMPPs is better than expected, but it is to be seen how many of these players actually submit the RFP," said Debasish Mishra, Senior Director at Deloitte Touche Tohmatsu India.

Given the current investment scenario, several players may find it difficult to raise debt in excess of Rs 20,000 crore for each of these projects from domestic institutions.

"There are major changes in the bid structure vis-à-vis the earlier UMPPs. The bidder now has to bid for a single capacity charge for year one -- capturing all elements of costs spread over 25 years into this one figure could prove to be a major challenge,” Mishra explained.

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